Page #134 (20.5 High Net Present Value)


20.6 Near Breakeven Point

Near breakeven point means selecting a SPI method that will yield benefits in the shortest period of time. Near breakeven point means evaluating whether the benefits of a SPI method will come in the short, medium, or long term . Near breakeven point means gravitating toward SPI methods with a short breakeven point, and it means shying away from SPI methods with a long breakeven point.

We have all heard the same old rhetoric: SPI is a long journey. We must do SPI for the sake of doing SPI. It's not the outcome that matters, but the lessons we learn along the way. These philosophical arguments are okay for some people.

However, these arguments are meaningless to the profit-driven commercial firm. Commercial firms must repair the process now, increase the yields tomorrow, and draw a profit in the near term. These arguments also do nothing for large, nonprofit organizations. They are often charged with creating a five-year budget to effectively manage from fiscal year to fiscal year.

Large, nonprofit organizations, like profit-driven commercial firms, need to maximize the value of their investments. They must maximize the power of every spending dollar. They must responsibly purchase the largest number of products and services for their spending dollars.

Some may argue that the benefits, B/CR, ROI, and NPV are the most attractive features of the top-performing SPI methods. The top performers may seem like the Personal Software Process SM , Software Inspection Process, and Team Software Process SM , or the Software Capability Maturity Model , ISO 9001, and Capability Maturity Model Integration may seem like the top performers.

Their breakeven points are even more interesting, however. Their breakeven points are $106,545, $133,751, $154,160, $464,616, $1,369,206, and $1,653,332, respectively. These numbers begin to make sense only when we examine what they mean in practical terms. These SPI methods begin to yield their benefits within 2, 129, 14, 383, 2,991, 1,363 hours after project start.

The Personal Software Process SM , Software Inspection Process, and Team Software Process SM yield their benefits within a month of project start. Wouldn't your organization's executives like to know that? The Personal Software Process SM and Team Software Process SM begin to yield their benefits in less than two days.

The breakeven points of these methods are probably the most interesting results of performing ROI- related analyses. Why? Well, for many of us, SPI is merely a long and noble journey whose breakeven point lies far out into the distant future. It is commonly believed that only the most visionary commercial firms and large, nonprofit organizations embark on such SPI journeys.

It is clear from these ROI-related analyses that even small, fast-moving commercial firms and organizations can succeed with SPI. If well orchestrated, they may even do so in days.




ROI of Software Process Improvement. Metrics for Project Managers and Software Engineers
ROI of Software Process Improvement: Metrics for Project Managers and Software Engineers
ISBN: 193215924X
EAN: 2147483647
Year: 2004
Pages: 145

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